Brooklyn real estate has a way of turning ordinary families into taxable estates. A brownstone bought decades ago, a couple of accounts, and a life insurance policy can quietly push a Brooklyn family across New York’s estate-tax line. To plan well, it helps to compare the two tax systems that may apply and the costs they impose.
New York’s Estate Tax
For 2026, New York exempts estates up to a basic exclusion of $7,350,000. If your taxable estate stays below that figure, no New York estate tax is due. The state tax is separate from the federal system and applies to New York residents and to non-residents who own New York property — including, of course, Brooklyn real estate.
The New York “Cliff” — The Trap That Surprises Brooklyn
This is the feature that catches families off guard. In most tax systems, only the amount above the exemption is taxed. New York is different. If your estate exceeds the exclusion by more than 5 percent — above roughly $7,717,500 in 2026 — you fall off the “cliff” and the entire estate becomes taxable, not just the excess. A Brooklyn estate landing just over the line can owe tax on every dollar. Planning to stay under the cliff is therefore enormously valuable, and even modest gifting can make the difference.
How the Federal Estate Tax Compares
The federal exemption is far higher — in the multi-millions per person — so most Brooklyn families never owe federal estate tax. But New York’s lower threshold means you can owe state tax while owing nothing federally. For the typical Brooklyn homeowner, New York’s tax, not the federal one, is the planning concern.
Don’t Forget Probate Costs
Estate tax is only one expense. Separately, assets passing under a will go through probate in Kings County Surrogate’s Court under New York’s Surrogate’s Court Procedure Act (SCPA). Probate is a public, time-consuming process. A revocable living trust under EPTL Article 7 can keep assets out of Surrogate’s Court — a real benefit — but be clear-eyed: a revocable trust avoids probate, it does not by itself save estate tax. For tax savings you generally need irrevocable strategies.
Comparing Your Levers
To reduce New York estate exposure, families weigh several tools: lifetime gifting to shrink the taxable estate, irrevocable trusts to move assets out of it, and credit-shelter planning for married couples to use both spouses’ exclusions. Each has trade-offs in control and flexibility. The right mix depends on the size of your estate relative to that all-important cliff.
Consult a New York Attorney
The New York cliff makes these numbers unforgiving, and exclusion figures change over time. Before assuming you are above or below the line, have a New York estate planning attorney review your Brooklyn assets and model the tax and probate picture for your family.
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